Key statistics

Is MCO a good stock to buy in 2026?

MCO stock appears overvalued based on traditional metrics, with a P/E ratio of 30.39x significantly higher than the sector average of 20x. Furthermore, our discounted cash flow (DCF) model indicates a fair value of just $182.98, suggesting the current price is overvalued by 57.3%. Despite this, a substantial 56.2% of analysts rate MCO a ‘Buy’ with a consensus target offering 27.0% upside, indicating a divergence in perspectives.

2026 MCO price scenarios

Based on analyst consensus of $544.75 from 32 analysts. Not a prediction by Alert Invest.

About Moody’s Corporation (MCO)

Moody’s Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody’s Investors Service and Moody’s Analytics. The Moody’s Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as and structured finance securities.

Moody’s Corporation, under the leadership of CEO Robert Scott Fauber, is a global leader in integrated risk assessment. With approximately 15,795 employees worldwide, the company’s distinctive strengths lie in its entrenched position as a critical provider of credit ratings and financial intelligence. Its dual business model, encompassing Moody’s Investors Service and Moody’s Analytics, provides a resilient revenue stream, benefiting from regulatory requirements and long-standing client relationships that create significant barriers to entry for competitors.

MCO competitive moat and business analysis

Moody’s Corporation benefits from a formidable competitive moat, primarily driven by its indispensable role in global financial markets. The credit rating industry is characterized by high barriers to entry, strong network effects, and critical regulatory functions. This allows MCO to command impressive profitability, evidenced by its robust net margin of 31.69%. While Return on Equity (ROE) and Return on Invested Capital (ROIC) data are currently unavailable, the high net margin strongly suggests efficient capital deployment and a dominant market position, enabling the company to maintain pricing power and consistent earnings.

Moody’s revenue streams are diversified across its two main segments: Moody’s Investors Service (MIS) and Moody’s Analytics (MA). MIS provides credit ratings, research, and risk analysis services, essential for bond issuers and investors globally. MA offers a range of financial intelligence, software, and analytical tools for risk management, compliance, and financial research. These segments serve different but complementary needs within the financial ecosystem, providing geographic diversification across various global markets, though specific segment and geographic breakdowns for 2025 were not provided in the supplied data.

The company’s moat appears to be strengthening, fueled by consistent demand for its services and strategic acquisitions. Moody’s reported revenue growth of 8.9% year-over-year, indicating healthy expansion. The increasing complexity of financial regulations and the continuous need for sophisticated risk management tools further entrench MCO’s position. Although no specific transcript quote is available, the company’s leadership frequently emphasizes innovation in data science and AI to enhance its analytical offerings, ensuring its continued relevance in a rapidly evolving market.

When evaluating MCO stock, it’s insightful to compare it against its peers in the Financial Services sector. While direct competitors in the credit rating space are few, other financial data and exchange companies offer alternative investment opportunities. For instance, investors might consider comparing Moody’s business model and growth trajectory against those of companies like Brookfield Asset Management (BAM), Bank of Montreal (BMO), and Bank of Nova Scotia (BNS). Each peer offers a different risk/reward profile, and a detailed side-by-side analysis, such as MCO vs BAM, MCO vs BMO, or MCO vs BNS, can highlight relative strengths in valuation, growth, and stability.

Moody’s Corporation analyst rating

Based on 32 analysts. 56.2% rate MCO Buy or Strong Buy.

A 56.2% “Buy” rating for MCO stock from 32 analysts is generally considered a strong endorsement within the Financial Services sector, suggesting a positive outlook by a majority of covering institutions. While not an overwhelming consensus, it indicates confidence in the company’s future performance and an attractive upside potential given the consensus target.

Is MCO undervalued or overvalued?

The current MCO valuation metrics suggest the stock is trading at a premium compared to its industry peers. With a P/E ratio of 30.39x, MCO is significantly more expensive than the Financial – Data & Stock Exchanges sector average of 20x. This higher multiple indicates that investors are willing to pay more for Moody’s earnings, likely due to its strong market position, consistent profitability, and perceived resilience. However, for value-focused investors, this elevated P/E could signal that the MCO stock is currently overvalued.

A deep dive into fundamental valuation, specifically using a discounted cash flow (DCF) model, paints a starker picture. Our DCF analysis estimates a fair value for MCO stock at $182.98, which represents a substantial 57.3% discount to the current trading price. This discrepancy suggests that the market’s current pricing for MCO significantly exceeds its intrinsic value as derived from future cash flow projections. Investors considering whether is MCO a good stock at its current price should carefully weigh this DCF assessment against the analyst consensus, which offers a significantly higher price target.

MCO financial health & key metrics

For value investors assessing MCO stock, the financial metrics present a mixed bag. While the company boasts exceptional profitability with a net margin of 31.69% and strong revenue growth of 8.9%, its valuation multiples, particularly the P/E of 30.39x (compared to a sector average of 20x) and the discounted cash flow (DCF) fair value of $182.98, indicate a significant overvaluation. Furthermore, a debt-to-equity ratio of 2.44x points to a higher leverage profile. These factors suggest that while MCO is a high-quality business, its current price may not offer an attractive margin of safety for strict value investing principles.

Moody’s Corporation earnings history & next report

Moody’s Corporation reported EPS of $4.33, beating estimates by 2.61%. Next earnings: 2026-07-22 with EPS estimate of $4.19.

For the upcoming earnings report on 2026-07-22, investors will be closely watching several key metrics beyond the headline EPS estimate of $4.19. Particular attention should be paid to guidance on future revenue growth, especially within its Moody’s Analytics segment, which often provides more stable and recurring revenue. Any commentary on the macroeconomic environment’s impact on debt issuance volumes and the demand for credit ratings will be crucial. Furthermore, updates on strategic initiatives, cost management efforts, and share repurchase programs will offer insights into management’s confidence and capital allocation priorities, all of which could influence MCO stock performance.

MCO daily short volume

Short volume data from FINRA CNMS Consolidated — shares sold short in the most recent US trading session. A high short ratio can signal bearish conviction or a potential short squeeze. Updated every trading day.

MCO insider trading activity

Corporate insiders must report trades to the SEC within two business days.

Source: SEC Form 4 via EDGAR · Data: Financial Modeling Prep · Not investment advice

Recent MCO analyst rating changes

Moody’s Corporation stock news today

How does MCO compare to its peers?

When considering an investment in MCO stock, it’s prudent to evaluate how Moody’s Corporation stacks up against other prominent players in the Financial Services sector. While direct peers in credit ratings are limited, companies like Brookfield Asset Management (BAM), Bank of Montreal (BMO), and Bank of Nova Scotia (BNS) offer valuable benchmarks across different financial sub-sectors. These comparisons can help investors gauge relative value, growth prospects, and overall financial health.

FAQ — Moody’s Corporation (MCO) stock